Better have long

Presented by Maryless Casto

Thank you for inviting me to speak to this great gathering of businesswomen. At first I didn’t know if I should be proud or wonder what the hidden message was when I was asked to speak about failure. But then I thought about the lessons we learn from Asian philosophy and martial arts.

Failure is the other side of success. At its worst, it has the ability to rob us of our belief in ourselves and it defeats us. At its best, it’s the temporary set back that gives us the experience and strength to do better. Then the request to me was that it’s not failure I should talk about, but weathering business downturns. Well, I’ve made some mistakes over the years in my business, but I’ve learned from those mistakes, and I’m stronger for them and a better businessperson. I hope you can take advantage of some of the lessons I’ve learned from my experience.

I’d like to speak to you about the “perfect storm” of catastrophes that hit the travel industry and my business over the course of two or three years. All I can say is that if business conditions such as those we’ve just experienced don’t kill you, they’ll make you stronger if you learn from them.

The first major blow to the travel agency business was when airlines suddenly cut commissions to travel agents, and a major source of revenue disappeared overnight.

Second, the terrorist attacks on 9/11 brought all air travel to a standstill in the US for a week. The damage began at the WTC and the Pentagon but continued to ripple across our economy, wounding the hospitality and travel industries, beginning a recession that meant millions of jobs lost and thousands of companies forced into bankruptcy. Right after the terrorist attacks, we had the SARS crisis, which instilled fear in travelers and meant transpacific planes flew almost empty, and cities like Hong Kong and Toronto suffered long-lasting damage to their tourist business.

And third, perhaps the most pervasive and the least expected revolution, the Internet has changed how we all do business. Those travel agents who didn’t see it coming and adjust their business are doing something else now.

I knew that the airlines were going to change how they dealt with travel agents, so I was ready when they cut our commissions. We were able to move fairly smoothly to a transaction fee when the commissions were abolished, and I communicated with all of our corporate customers and got no push back about the change. They understand the value we add and are willing to pay for it. The lesson here is to be sensitive to what’s going on in your industry and the larger economy and be prepared for when it happens.

There was no way that we could anticipate or prepare for 9/11. What happened was so unexpected, so devastating that the whole world went into shock. But we couldn’t stay in shock for long. I needed to know where all our traveling customers were. I had to find them and protect them. And in a way, we had prepared for that. We had our data, our computer system, and we used it to locate every client, to get them hotels, rental cars and whatever else they needed.

Our Web site was the first to link to the FAA and the airlines. We had that up and running almost immediately after the attacks. It took American Express two days to get their Web site up.

The major fallout of the attacks was that travel stopped completely. We had no income for two months. We went from $14 to $15 million a month to nothing. We had to move fast, and I let my heart get in the way. I didn’t restructure fast enough. I didn’t lay people off fast enough. And that meant putting my own money into the business. I knew the business was strong enough to survive, but you can’t fall in love with it and be blind to what you have to do. I closed one office, eventually laid off about 100 people, closed the meetings and incentive division and looked to leisure travel as a new part of our product mix.

The lesson here is that when catastrophe strikes, you have to be a leader. You have to be strong for your employees and your customers so you can weather the crisis, whether it’s SARS, a recession or something as horrible as 9/11. And you have to use all your resources, such as technology, to find and protect your customers and get them home safely.

The third crisis also presented the biggest opportunity. I knew 15 years ago that computers and the Internet were going to change our industry. We’re headquartered in Silicon Valley, ground zero for technology. I assigned one person full time to learn about the Internet. We built the first major independent travel agency Web site. We then built sites for each major customer, so clients could book travel on their customized site, check the status of their traveling executives and so on.

We knew that customers would book flights and hotels and rental cars online. That means that we have to offer much more value through our services, and technology enables us to do that. For instance, we booked 800 corporate client executives to Europe for a sales meeting. We knew that most of them would want to extend their stays to take advantage of the trip over. So we built a special Web site for these customers where they could choose from several tour packages. We were able to handle those 800 travelers and their needs with only seven people, not the 30 or 40 it would have taken without the technology.

Before the Internet bubble burst and Silicon Valley businesses retrenched during the downturn, we were a corporate travel agency. We became the largest independent travel agency west of the Mississippi on the strength of our corporate travel services. We were the complete travel solution for many major companies in technology.

With the “downturn” after the tech stock market imploded, corporate travel became a luxury. Technology like WebEx and PlaceWare enabled meetings to be held online. Then 9/11 gave corporate travel the final push, and that entire market segment slowed to a crawl.

Over the years, we’ve grown through acquisitions and the ability to plan our growth strategically. Now was the time to adjust our business model and move into leisure travel. The last seven acquisitions we’ve done have all been leisure companies.

We already had the infrastructure—the Web sites, computer technology, great customer service and very knowledgeable agents. Now all we had to do was attract the leisure traveler to us. We acquired seven smaller leisure travel agencies that brought their clients with them, adding to our existing client base. We also created a Casto vacation Web site, did more client travel fairs at companies, schools and private clubs to introduce our leisure capabilities, and the rest is history.

It’s taken two and a half years, but we’ve turned a very bad business situation around and are poised for greater growth and profitability.

Conclusion

While I’ve given you examples of how my travel company has coped with downturns in the economy, the lessons I’ve learned apply to just about any business, whether it’s a cosmetics manufacturer caught short by an abrupt shift in fashion or a computer company facing competition from technology that’s faster, smaller and cheaper.

This is what I’ve learned:

Business is business, whether you’re a man or a woman.

Know what’s going on in the world, in your industry segment, and prepare for change. That’s the one constant you know will happen. Things will change. The more prepared for change you are, the more flexible and creative you can be, the more you can embrace change and make it part of your competitive advantage.

Look at the big picture. Don’t let your heart get in the way of tough decisions you have to make to keep your business strong. If 10 people have to be laid off the ensure that 50 will still have jobs and you will still have a vibrant, profitable company, then those 10 people have to go.

Learn from the mistakes and successes of others. I am so fortunate to have had many great mentors throughout my career: my passengers while working in the airline industry, and my clients in the travel agency. These contacts have taught me a great deal about customer service and what it takes to make the customer happy and business successful.

Keep your eye on your customers. Know what they want and give it to them. Don’t be afraid to charge for what you provide. The value you bring with your service or product is worth the price you ask. Make the exchange fair for both sides, and don’t shortchange yourself.

Do what you love, and the money will follow. We are drawn to people who are passionate about their work, who clearly love what they’re doing. If you don’t love your work, find out what kind of work you would love, and then do it.

And lastly, trust yourself. You know your business. You know who you are. You know what you can do. All we have to do is to do it.

Any Questions & Comments, contact GlobeWomen at summit@globewomen.com. Or, write to us:

Globewomen, Inc./ 666 11th St. NW, Ste. 700/ Washington, DC 20001/ USA

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